You have worked hard to create a life that is full of dreams and happiness for you and your family. Well one day, you see that you are going to retire from work but not life. Maintaining your day-to-day lifestyle without worrying about expenses can lead to your unfulfilled dreams for your post-retirement life. You want to spend more quality time with your loved ones or travel the world. You may also want to fulfill commitments like your child’s higher education or marriage or a new start-up.

With a little retirement planning, you have the power to fulfill all your desires while maintaining your financial independence. Retirement planning is the process of setting retirement income goals – the actions and decisions needed to achieve those goals. Retirement planning involves identifying sources of income, shaping expenses, implementing a savings program, and managing assets and risk.

It is very important to calculate your estimated retirement expenses post inflation and plan your investments accordingly to avoid any surprises later.

To calculate the money you’ll need at retirement:

• First your average current monthly expenses are to be calculated.
• Once you get that figure, you need to get the monthly requirement figure, which will be required after retirement taking into account the inflation figure.
• Once you get the figures, one has to calculate the corpus who will be able to give monthly returns from the same.

Now the question of one million dollars comes that how did we reach such a huge fund?

Start saving early and invest wisely. Starting early means that if you start late, you will have to invest much less to make the same amount. The calculation shows that if a person starts saving at the age of 25 and the monthly investment is Rs X per month, he will have to invest approx. 2X Rs, if he starts 5 years late, say by 30 years.

Process: Compare the different retirement options and plans that most capable financial organizations offer. Preferably, take the help of an experienced financial products distributor who will be able to guide you through various investment products. A distributor/consultant helps you to identify the various retirement planning strategies that exist and also helps you to review and compare them. Set your retirement goals. Assess your current financial situation. To help you achieve your retirement goals, you need to take stock of where you are today. You must consider the risks that affect your retirement income. Keep your investment process simple! That’s what’s most important. Be disciplined!

To build a corpus, start early, invest regularly, and don’t dip into your corpus before you retire. Remember that if you dip into your savings at regular intervals, you may benefit very little from the power of compounding. This can put you behind several stages of your retirement planning. You should become an aggressive investor when you are young and gradually move towards conservative products as you approach retirement age. Taking a chance in the stock market at the age of 60 would be like bungee jumping at the same age. Just as you would shy away from taking risks with your health, you would not want to play with your money. So, follow the 100 minus age rule for retirement planning. If you are 30, invest 70 percent of your portfolio in equity-related investments and keep reducing it with age. This not only helps in reducing the risk but also gives you good returns from an asset class like equity which can give good returns in the long term.

Surprisingly, a large number of people look for excuses not to start retirement planning. However, in the absence of a decent retirement benefit in India, it means you have to plan your investments for your twilight years especially in inflationary conditions as mentioned above and plan carefully for increasing life expectancy. Will be No matter how hard debt or other spending priorities are, you should be saving for retirement regularly. Retirement is expensive.

So, cherish every moment from now on. happy retirement!

Views are personal: Author Mudit Khanna- Director, Insoft Financial Services from Kolkata.

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